A study has shown that between 1999 and 2009, the number of divorce cases between elderly couple, mostly age above 50has increased to double. So what do you when both the parties involve the divorce are old, physically or possibly mentally unhealthy and becoming closer to their retirement. The other party will probably not be able to pay alimony, which is the financial support a non-earning spouse is entitled to. In this case, your financial rights will be handles under the division of retirement benefits in divorce.The Qualified Domestic Relations Order aka QDRO can come to your aid. This law was specifically made to ensure the retirement rights of the people.
The amount of funds for retirement that were saved at the time of marriage are considered marital property and should be distributed equally between the both parties that are seeking a divorce. However, the distribution of these funds also depends on a number of factors such as the 401K law and as said above the QDRO. At the time of divorce, you should think financially not emotionally, particularly if you are an elderly couple. The division of a pension plane can be thorny road that can complicate a lot of things, that is why it is critical that your divorce settlement plan clearly states about the division of your retirement assets.
The correct Use of QDRO
The Qualified Domestic Relations Order should be correctly used and you must finalize your pension plan before your divorce is finalized.QDRO is a court decree regarding alimony, child support,can affect the pension plan of your spouse and determines how much to give you as your share of the pension plan.Many couples think that their retirement and pension plans are securely being handled in the divorce agreement, however, that is not the case. The retirement plan makes up a huge net worth of the marital propertyand their division can be a bit tricky. The inexperienced lawyers can become a huge factor in mishandling the pension funds. It is also accompanied by many tax implications.
Consult an Attorney
The QDRO and pension plan can be complicated to understand and explain in minimum words that’s why it is recommended that you consult an attorney or a QDRO specialists for proper counseling and guidance regarding the division of your retirement plan.Be sure to remember that Qualified Domestic Relations Order is only applicable to the retirement plans that are qualified by IRS tax system and covered by ERISA that is Employee Retirement Income Security Act. The pension plans that are covered by military or government laws are not governed under the QDRO. Qualified Domestic Relations Order is not necessary for dividing IRA or SEP assets.
Make sure to employ an experienced attorney who is well-versed the Qualified Domestic Relations Order because it tends to be tricky and if your lawyer happens to overlook even a single point, it can cost you a huge sum of money in the form if legal fees and ensure that your retirement rights are protect after divorce.